ANNOUNCEMENT 04 Oct 2010

In October 2010, the government of Spain announced a change in private-sector financial support.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising
Inception date: 25 Mar 2012 | Removal date: open ended
Still in force

Capital injection and equity stakes (including bailouts)

On 4 October 2010, Banco CEISS was created as a result of the merger of two saving banks (Caja de Ahorros de Salamanca y Soria and Caja Espańa de Inversiones, Caja de Ahorros y Monte de Piedad) (par. 2, letter from the EC to Spain, Brussels 20.12.2012)
 
During the merger process, the Spanish government program FROB ('Fondo de Reestructuración Ordenada Bancaria') supported the newly established bank with a capital injection of EUR 525 million in the form of convertible preference shares, on 25 March 2012.
 
On 12 December 2012, Spain notified the restructuring plan to the EC. Following the stress test for European banks and the new solvency levels, a new recapitalisation was needed. Consequently the FROB injected EUR 604 million in the form of ordinary shares purchases. (par. 29)
 
Furthermore, Banco CEISS transferred impaired assets to a bad bank called AMC. The transfers amount to EUR 717 million. (par. 23)
 
The EC finds that 'the measures potentially distort competition as they allow Banco CEISS to obtain the capital necessary to avoid technical insolvency (in the adverse case), and thereby prevent its exit from the market.' (par. 91)
 
The EC finally concludes that: 'the measures are likely to affect trade between Member States because Banco CEISS continues to compete on the Spanish retail market, the mortgage lending markets and the commercial lending markets.' (par. 92)
 
The EC also names potential affected countries by stating that: 'In all those markets, some of banco CEISS competitors are subsidiaries and branches of foreign banks. (par. 36)
 
Update: New restructuring plan and integration of Unicaja - SA.36249
 
After Banco CEISS integrated Unicaja Banco on 13 May 2013, Spain released a new restructuring plan and seeks to extend the existing measures in several ways:
- More impaired assets (200 million) are transferred to the AMC.
- Litigation costs add up to EUR 241 million to the FROB capital injection (par. 26, letter from the EC to Spain, Brussels, 12.3.2014)
 
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory

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